loss and strong revenue growth square slumping on weak earnings guidance, and aig under pressure after missing its bottom line. >> i didn't get the popcorn for the tesla call and see the stock action as it evolves from here. >> that's true we'll hand it over to "fast money" for all of that that does it for "closing bell," everybody. "fast money" starts right now. "fast money" starts right now live from the nasdaq market site overlooking new york city's times square i'm melissa lee. on the desk pete najarian, karen finerman and guy adami tonight tesla volatile after reporting earnings moments ago the conference call with ceo elon musk kicks off in 30 minutes. we'll bring you all the latest details. plus, square getting slammed after its report that stock is down by about 5% we'll be monitoring what ceo jack dorsey has to say and this just days after short seller andrew left says the stock has been soaring only because of what he calls a bitcoin nonsense he will join us to make his

short case the market sell-off, not even strong earnings from apple or fed with the drew selling off into the close, falling back into correction territory. so where are the wall street bulls right now? what needs to happen for stocks to rally again guy. >> kudos to dan nathan said a very good chance, a very good chance that apple knocks the cover off the ball, has a big rally in apple and that doesn't do anything to the broader market and the broader market sells off that's exactly what happened today. well done by dan we've seen ridiculously strong earnings out of a lot of these market companies that haven't done anything for the broader market what i think needs to happen for the bulls to take charge again, a couple of different things maybe we take another run at that 2580 level and hold in the s&p and bounce that's number one. pete just pointed out just put out a piece on twitter what happens if peace breaks out? maybe some of the geopolitical

unrest out there somehow goes away i think that could be a possible thing. but i do think the overhang right now has been complacency as measured with a 15 and change vix. and the other is the fed's absolutely in plays play. >> but wouldn't complacency at a higher market, not a lower >> i think it's complacent -- the market is sort of inched lower day by day you don't have a big sell-off. pete was saying we're only down .7 of 1%. you haven't had a flush to get that complacency level maybe back above the vix that is a concern. >> you need some real fear well talk about how much we're off the highs, yet the s&p 500 is down less than 1.5% on the year, right? and this is a year after it rallied 20% without a 3% peak to trough decline in 2017, or for more than 400 days to me, we've had a lot of volatility this year i don't really care where the vix. what i care about the leadership we talk about apple's rally,

facebook's rally last week, amazon's rally last week it feels like the s&p 500 is taking one step forward, two steps back a little bit. that's kind of been a theme of mine right here. until you test that 2580, maybe break it, get some other things that risk asset land kind of going a little crazy here, then i don't really think you can rally. because right now the s&p is in a pretty well defined downtrend. >> downtrend, but it's also in a range. if you look at the volatility index, 15 to 18 has been the range for the last two and a half weeks now it feels like there is one of the markets where it's there just enough caution out there. it seems like to is caution. is the caution the zio political zach karabell is talking about maybe we'll find out more as we start hearing more about what's going to happen with china and some of the negotiations and i think that would be something. also, let's not forget, we talk about this all the time. >> know it's back underneath or right around the 3%. but a 3% is something that seems to be something that everybody looks at when they're looking at the ten year and they say you

know what? a 3%, that says sell >> right. >> it seems as if that has been pressuring the market as well. >> uncertainty around china and tariffs and sanctions and all that uncertainty when it comes to the iran deal >> yes. >> we have a dollar that is moving higher. think of all the company earnings reports in which the company's ceos, the management, the conference call cited a weak dollar as a benefit. that reverses with the dollar sitting at 2018 highs there are a lot of things here to be cautious about but is that your opportunity to buy? >> i feel like it is but it presents me more opportunity every day that goes by so where are the bulls i'm bullish. i'm long i'm always long. so, you know, i do think there is opportunities here. i've been surprised and wrong about how badly the market is trading on good earnings we did have a couple of good earnings that have held in but, you know, you just see companies come out with really what should be decent numbers which should be enough i go back to the cat call as being so interesting to me that the market was just looking to

freak out over what i thought was a pretty bullish call. and i thought they were misinterpreted i'm interested they're going to be presenting may 8th. i'm curious to see whether they clarify those statements at all. >> i don't think they would want to clarify if there is clarification to be made. >> that's disappointing to me. i still like the banks i like the valuation still like some of the fangs i'm long facebook. long alphabet. i'm long a little bit of cat now. it's frustrating the only they think is working is energy. >> it's important to remember that we've seen a patch of weak data we've seen it here and europe. we're going into a summer period obviously seasonally we see slowdowns in certain industries here i'll just mention there are scenarios this summer where all of the sudden you can see the s&p 500 above 3,000 in the fall, if we had peace like you just mentioned in north korea, we had some sort of trade agreement with china, something on nafta maybe we were more engaging on things like the paris.

and maybe all this stuff in washington cools down and the mueller thing goes away. you have an s&p that would be on the way to 3,000 that's a lot of stuff that has to happen. are we as good as it gets on the earnings front you mentioned a ten-year treasury we have a 2% or less s&p dividend yield we have maybe as good as it gets margins in earnings. maybe we're just fair valuish. we're 16 times forward, 20 times. we're going to bang around maybe you're going to have an opportunity to buy things when they hit on bad headlines and the opportunity to trade them as they go towards the highs. >> what i'm looking for really is looking for something that has great headlines and then goes the wrong way and we're not seeing a lot of that we've seen some of that. i think the industrials is a good example of that where the numbers are great. but they give you great numbers. and by the way, i've seen more and more bearish paper over the last several days, the industrials index that makes you a little bit concerned but they have been running, running, running, running.

boeing we talk about almost every single night look what it did last year you wonder at some point do, people look and say valuation wise, gosh, i'm a little concerned over some of the names, and i'd love to see a pullback those are names you want to watch, but what level you want to buy them you have to look from p/es are. >> that said, still in play, you get a jobs reported on friday. is good news bad for the market? is bad news good for the market? >> forget about the absolute jobs number, the unemployment rate i'll say that the wage number to me is important. if you see wage growth, significant wage growth would be bad news for the market. under the set of circumstances you set forward, yes, good news is bad newsment. >> thoughts now? >> i was watching you today when the fed stuff came out you asked steve liesman was it hawkish? >> that's all i wanted to know. >> i thought it was a great point. and steve was thoughtful here and said it was a moderate change they're really trying to walk a line i think you can be able to do that with a lot of this data

i think if jobs started a weekend and we had all the pmis and those starting to weaken. >> so everything is bad news >> under that scenario i think if we start to turn, if the data starts to turn nine years into the cycle like it is right now where there is still a lot of optimists, then it's bad for the market if we have bad data our next guest says the risks to the markets are on the rise let's go off the charts with chris verrone of strategic research partners to find out why. hi, chris. how you? >> i think what is interesting in an environment where down day to day, there has really been no safety trade s&p year to date down about 1.5. these are utilities, down 3. bonds down about 5%. consumer staples all the way down here, down about 11 so for a year where the market has struggled, there really haven't been a lot of places to seek refuge. now conversely, if rereverse

this chart and year to date here is the s&p, down about 1%. these are small caps outperforming. these are regional banks, outperforming. this is oil up sharply so i think what has been unique about 2018 is under the surface, leadership has been risk-seeking and if we zero in on small versus large in particular, i think it's notable today russell 2000, big performer held its 50, held its 200 this is small caps, relative large caps making about five-month relative price highs. under the circumstances, the small verse large back is supportive what is worrying investors our sense is that the weakness in the industrials has been a major source of concern for many but what we want to point out is actually flows into the xli, the industrials etf are about as washed out right now at any point we've seen in four or five years. that's a contrarian signal that we think industrials can find some support and actually start to resume higher here. >> i think chris comes over. what do you think? on a day like today, we need

chris's help chris, come on over. ryan will bring the chair in ryan is off after a couple of days off thank you, ryan. chris, good to see you. >> good seeing you >> we were talking about individual industrials because the industrial sector as a whole is comprised of many interesting, very different sort of stocks. so are there certain stocks that look better or worse >> yeah, there are and i think we need to enter with the premise that this is an important sector industrials have the highest r squared with the s&p 500 >> correlation >> exactly >> so when industrial stocks are going up, you can't be bearish on the market. conversely, when industrial stocks aren't working, things often get more challenging what we're interested here is this flush and flows looks pretty climactic for this group. i wouldn't be surprised whether some of the names that are washed out can actually start to bounce what has been most notable in the sector, the railroads have held up okay here, norfolk southern, csx. i think transportation is actually probably a little bit better than people give it

credit for right here. >> so you talked about the russell strain. >> yeah. >> you want to be in the united states which russell tends to be more u.s. centric. >> sure circumstances that where you want to be right now >> i think that's certainly the message of the dollar right here from a sentiment perspective, i haven't walked into a room in three months where there have been dollar bulls. i think the response from the dollar here recently is being reflected in that small cap first large cap trade. what i would also note, dollar strength, if there is a consensus trade that may be at risk here, i wonder if em deteriorates in relative terms given some dollar strength that's the area where we probably have to be more careful. look closer to home to find opportunities. >> so talking about the russell real quickly, i had a short on for about a week i took it off today. that relative strength is really a problem in my mind is that the first u.s. equity index that you would expect to get back towards the highs obviously it's the closest one to its highs but is that the one that you

want to play for beta? >> yeah, certainly it's right there. and if i add one more index to the list, the value, about 1700 issues, it's a very good barometer for what the average stock is doing that's held up better than the market as well so i think anything that captures the average issue instead of the big issue acts better here. >> chris, thank you. >> thank you >> chris verrone of stragis. coming up, all over the action it happens in about 17 minutes from now elon musk is already on twitter, taunting the haters. we'll tell you what he said. meantime, spotify and square are getting slammed. we'll bring you the latest details. plus, as square sinks, andrew left is taking aim at the high-flying tech stock he'll explain why he is calling it bitcoin nonsense. and later, the disney dilemma. 52-week lows despite blowing away the box office with its latest hit "infinity wars.

could it be espn holding back the magic kingdom? we have all the details. we're live from times square in new yorkit chor"ft ney" right after this i wanted to be free of their constraints. at my firm, i act in the best interests of my clients. i can tell them i'm supported by one of the world's strongest, most admired financial firms. fewer constraints, the freedom to do what's best for my clients. that's why i'm independent. charles schwab is proud to support more independent financial advisors and their clients than anyone else. visit findyourindependentadvisor.com

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dilemma. the box office is booming with the new movies from avengers bringing in $800 million globally espn continues the weigh on the continue reports out espn lost 500,000 subscribers in the month of april alone. all of this is happening while the stock is under pressure, down more than 13% from its highs. check out the chart. shares sitting near their 52-week low of $96 hit back in september. so is espn iger's biggest issue? if so, what should he do to fix the stock? >> it is a big issue we talk about it forever if this was the crown jewel, we used to say espn is the crown jewel, including myself. over time it seems like the crown jewel has gotten a little bit dull >> is it at issue for the right reason is that what you say if espn fails, the rest of disney does not work >> no, i wouldn't agree with that part of it. and i think if i'm iger, being one of the best ceos out there, he has to turn the ship by

changing some of the focus they are killing it at the box office they are killing it at the parks there are areas where they're doing an outstanding job but espn's not one of them and i think there is plenty of changes. and i think as critical as anybody what espn has been doing as a group and i'll tell you what, they still have a lot of changes that need the make for people to want to come become and stop losing 500,000 people in a single month. >> that's a lot of subscriber. >> that's huge. >> a lot of subscribers. aside from that, they have a very big strategic issue that is very much in flux. we're not going to know for a while. we're not going to know at least until june 12th when we whatever in the time warner-at&t decision is whether fox and disney can move forward. so that's going to weigh on them for a while. >> in the meantime, in my opinion, netflix continues to eat their lunch. whether they vunet flicks as a competitor or not, they should you talk about disney. disney is a stock that made it an all-time high in the winter of 2015. that's quite some time ago if

you go back and look it's been a long time sideways to lower sense again, what's the right multiple in a space that is decelerating for a company with 10% earnings growth >> thanks for catching. >> thanks for the props earlier, but. here is the thing. i think it's kind of apples to oranges if you think about it if you're comparing netflix to disney >> i don't know. >> disney is going to be pulling off all that content off of netflix. netflix is also in the business of making original content that's only reason people are going to stay there. on disney, you're honed in on the right thing. what do they do here how do they stem the losses in espn we know the trends we know what they're trying to do with espn plus, which they just introduced last month kind of interesting, right we know what they're doing with banta, what they're doing with their original content to me this is one of the situations that 14 times this year, 13 times you got to wait this out a little bit. i think you have room maybe to the mid to low 90s in the near term as they take a little pain. but this is a cheap stock.

bob iger is sticking around to get it right i don't think there is any reason to get nervous. >> if there was a mistake in my mind it was that they took so long to make this decision and move in to the area. >> but how do you make the decision that is ultimately going to be the spark that lights the fire of this secular ship i think they probably have been doing it in a manner that everyone feels okay about it in hindsight, it looks a little slow. >> how many times do we sit on this desk and say hey, disney, they have all this capital why don't they put some of it to work >> buy something. >> buy something >> spend $16 on pixar, lucas and marvel. >> some great moves. but they need to stay in front of it. >> right >> but it's going to be make or breck for disney report earnings next week. what do you see? there. >> is a pretty decent implied move in either direction it's only moved about 2.5% this is kind of interesting. well talk aboutabout implied mol

the time if you're going to pick a direction, if you're long stop, you want to buy calls or puts to protect or you want to make a directional bet, you only need to earn out 1.7%, or 1.75 if you are buying at the money put or call so think about it that way look at this chart to me, pete just said it, or guy did. that's really no-man's-land if you look at it over the last few years. knits a declining channel here but it's almost right at the mid point. and i don't think that one quarter that we're going to get next week is going to be the thing that breaks it out >> yeah, i don't think this quarter is the disney story. >> i think options for the most part are probably kind of expensive. i don't think you're going to get a big gap down or up. >> may i just retort quickly to dan's point about netflix and disney. >> sure. >> the disney content on net flick in north america is the pimple on the rear end of an elephant i don't think reed hastings is all that concerned with disney walk away. >> when disney content is not

there, oh, i'm not going to -- people who subscribe to netflix are going to continue to do that at some point the pendulum is going to shift it's everybody needs their disney because of the espn, because the marvel, because the "star wars." and then they're going to say how good is that house of cards crap or whatever else they got going on there that's what i'm saying >> you're a turn >> netflix is not proven the hit factory that hbo that's one of the reasons that hbo is such a prized property in this over deal we're just surrounding the trade here. >> "options action"s friday. >> i like "house of cards. check out the full show 5:30 p.m. eastern time on friday. coming up, tesla volatile after hours and elon musk is already taking to twitter to gloat about the results. the stock, though, is now down by 1%. we'll hear what he had to say on twitter after the break. i'm melissa lee. you're watching "fast money" on cnbc, first in business and worldwide. in meantime.

>> square. >> he'll explain what he thinks wall street is getting wrong about the ghlyhi-fing tech stock when "fast money" returns. well, it's earnings season once again. >>yeah. lot of tech companies are reporting today. and, how's it looking? >>i don't know. there's so many opinions out there, it's hard to make sense of it all. well, victor, do you have something for him? >>check this out. td ameritrade aggregates thousands of earnings estimates into a single data point. that way you can keep your eyes on the big picture. >>huh. feel better? >>much better. yeah, me too. wow, you really did a number on this thing. >>sorry about that. that's alright. i got a box of 'em. thousands of opinions. one estimate. the earnings tool from td ameritrade. with a $500,000 life insurance policy. how much do you think it cost him? $100 a month? $75? $50? actually,duncan got his $500,000 for under $28 a month. less than a dollar a day.

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but it's not kayak confident. kayak searches hundreds of travel sites to help me plan the best trip. so i'm more than confident. forgot me goggles. kayak. search one and done. welcome back to "fast money. the company conference call is six minutes away let's get to phil lebeau with what we can expect, what we're listening for. phil >> melissa, we're already seeing movement in tesla's share, fractionally higher, fractionally lower and elon musk, he is out taunting saying hey, what do you think of these earnings reports? i'm sure we'll hear more during the conference call. two things to focus on if there this earnings report

let's focus first on the model 3 and the questions surrounding production there the company said it built 2,270 for a week for the three weeks that fremont factory was operating in april and believes it's still on track to build 5,000 a week in about two months maybe not by the end of june, but shortly after that and it says it has more than 450,000 model 3 reservations and then there is the question of cash burn, because a lot of people were saying they could burn through 1.5, $1.8 billion in cash. huh-uh, that's not what happened in the first quarter cash burn $745 million so lower than many people were expecting. liquidity attend of the quarter, $2.7 billion the company did not mention anything about needing to raise capital. and don't forget, the earnings call starts in about ten minutes. we'll hear from elon musk and have some of his comments a little later on. melissa? >> so, phil, they burned less cash, and they're going to spend in terms of cap x less than they

originally told investors in 2018 does that make sense to you for a company that is ramping up production on model 3 and ramping up a giga factory? >> remember, in terms of that ramp-up production, that's why you need to get the model 3s out there. because then you get the cash flow coming in so in that regard, it does make sense. and a lot of this depends in terms of how quickly they can get the robotics remember, they blamed a lot of automation for the slow ramp-up. now the question is are they going to start to benefit from the robotics, especially the systems coming into the fremont factory as well as to the giga factory. >> the grumman's specifically for the battery. thank you. we'll let you jump on that call. it starts in about four minutes. phil lebeau on tesla the stock is now down by .9. >> i don't understand. i think it would be up they think they're going to achieve their goal of 100,000 deliveries by year end and be cash flow positive by the third quarter of this year if not the fourth quarter both of those things to me are surprisingly good. the quarter was probably in

line revenue in line. i know people are looking forrer there. maybe the fact that they're shut down for ten days, maybe that's a concern. but how do you trade it? you stay long against $280 i think. >> what do you think, dan? >> listen, the problem with what you said is no one has a high level in confidence that they're going to achieve those goals and that's been the story right now. that's one of the reasons the stock is trading 20% from its highs made late last year. listen, a lot of people are rooting for elon musk. a lot of people are rooting against them i'm on the side where i would love this to be true the worry that i have as they ramp production of the 3, the ramping down the s and the x and i almost wonder if they're cannibalizing the higher end sales. because the model 3 isn't particularly a mass market car at the price point it is right now. so to me this is going to continue to be a hairy year, and i don't think you're going to see an explosion back towards the prior highs any time soon. >> what is interesting about the tone this year is that analysts on the street, while they may be in large part bullish on the

stock with a lot of buy ratings out there, even the people with buy ratings believe still that tesla will l do a capital raise, regardless of what elon musk has said he said they will not require a capital raise equity or debt, but require doesn't mean won't and a lot of the street still believes that they will. >> i think they should why wouldn't that, right i don't understand why wouldn't they they have a few converts so if the stock goes up, those converts will end up being stock. and they -- they'll have extra cash if they issue debt. i don't know i don't understand why not the markets are open for it to try to come back to the market later if you need 80 tonight chance that maybe you were wrong on production? i don't know it seems like a risk it seems like you should be doing it at least somewhat. maybe you don't need to do the whole thing. >> and not that long ago we had the moody's downgrade. and we all said look, they need to a capital raise i think at some point they will. why not go to it now if they're going to need it at

some point, now would be the time to tap in he continues to overpromise, underdeliver that's exactly -- >> at what point does that magic wear off >> it's a great question i would have thought -- >> are we better off with wall street saying they are going to do a capital raise i don't care what he said about a capital raise. they're going to do a capital raise. >> he is saying they are a backlog for 400,000 model 3s, they should build a new factory that >> should ramp production. that's the thing he does have to prove the naysayers long it's a $50 billion market cap stock. this is not like a little stock, you know what i mean >> wall street is the haters and it's all the people who own the vehicles and the people who love the idea who are the lovers and are not selling the stock. and that's the tough -- >> convert hedging so it's not all short. >> there is still plenty of shorts out there as we all know. >> i think to pete's point, the major holders, the fidelities. >> baron. >> they're not getting -- i don't think they're getting out of this. they believe in the story.

so my question has been who is the incremental seller i would push back and say the move a month or so ago down to 254 was on the become of concerns of a capital raise. and the fact that it hadn't happened is maybe why the stock has levitated back to 300. >> by the way, we mentioned that elon musk is tweeting the quarter. he retreated with tesla beat expectations anson added the comment "la la la. that was 23 minutes ago, just ahead of the conference call the conference call is kicking off right now. we'll continue to monitor those headlines as they come out not just tesla with earnings square and spotify reporting and those stocks are getting crushed. we'll bring all the latest headlines as they break. chor"ft ne aermu me asmoy"ft this sing one of the most rigorous exams in the world. demand the best. demand a cfa charterholder. cfa institute. let's measure up.

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welcome back to "fast money. spotify getting crushed after its first earnings report as a public company let's get to julia boorstin in los angeles with the details julia? >> well, melissa, no comment in the call about the stock decline. daniel ek was really focused in discussing the long-term decision for spotify in creating a music marketplace. giving free service, more options is working, providing more ad opportunities as well as

potential to convert those users to paid subscribers. ek dismissed a question about whether apple music is eating into spotify's business. take a listen. >> we don't see any kind of meaningful impact of competition. in fact, when we look at this, we don't really think that this is a winner takes all market in fact, we think multiple services will exist in the markets, and we're all kind november a growing market. >> ek as well as the company's cfo saying they see opportunities beyond music including podcasts and the potential to help labels with marketing. they also see opportunities in the growth of smart speakers >> voice the growing there are more and more connected speakers in people's hoechlmes. spotify is available on alexis speakers and google home and we're doing fairly well there. so we actually do see our share of voice growing, and we view

that long-term as an opportunity, not as a threat >> if there has been a lot of talk on the call which just wrapped up moments ago about growing spotify into new markets, as well as getting into cars they also talked about the benefit of bundling, such as bundling spotify in with hulu. back to you. >> julia, thank you. julia boorstin dan? >> it's not getting crushed. the stock closed up almost 30% from its reference price a month ago when it was listed public. it is down 5 or $6 or $7 that's what it was up today. and i think you really want to differentiate between whiffing on their first publicly traded quarter as remember facebook was down 11% after their first one twitter was down 24% snap was down 21%. this is a company that chose in a alternative path to being public you should expect that there their communication and the way they manage this process going forward is going to be a little different. >> but let me just push back on that a little bit. because of the process they used to go public, they probably came out at a lower price than where

they do co. have if they had done a more traditional road show and gotten all hyped up. >> the stock has acted very well let's see how it acts tomorrow i'd be shocked to see it down more than 10% or something like that just based on the numbers they gave and the transparency that we have and the analyst meetings that they did in march what's changed nothing has changed. >> and the difference between something like this and snap is the acceleration of growth, right? when you see something like snap, which was decelerating this is a company that is showing incredible growth. but to your point, it has made such an unbelievable move to the upside that this pull bill clinton today, it might not even show up tomorrow as big a pullback. >> is this a buying opportunity? is this a buying opportunity >> i don't know. i think the narrative is a shallow one. i'm seeing the headlines and blogs, spot getting crushed. >> and it's up 30% in the last month. it's got a $30 billion market cap. and people have only seen one set of numbers over the last

month or so. i'm not pounding the table here. i'm just saying i don't like those false narratives >> premium subscribers up. growth was 45% year-over-year. monthly average users up 30% year-over-year if you want to nitpick, maybe second quarter guidance wasn't as strong as you would like it to be. but i'm sort of in the dan and pete camp. there are a lot of analysts with price targets of 200 and north thereof. to be honest, i wouldn't be surprised if the stock closes higher tomorrow. >> all right coming up, more earnings tesla is volatile while square sinks in the after hours session. we'll hear from ceos elon musk and jack dorsey. plus, it was the worst performing tech stock today, down 9%. ndd karen finerman bought it fi out the name, what has the chairwoman so bullish, right after the break. ♪

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welcome back to "fast money. square sinking after hours as the conference call is under way. deirdra bowes has been listening in she'll tell what's jack dorsey had to say deirdra? >> that's right. before he talked about bitcoin, how he is learning from it, at the start of the call laid out bitcoin's contribution to the business revenue from bitcoin contributed $34.1 million to total net revenue in the first quarter bitcoin costs $33.9 million.

so that is a very minor $200,000 add to adjusted revenue. but dorsey as i mentioned on the call saying that square is still in a learning phase when it comes to the cryptocurrency. have a listen. >> still in a learning phase of where we can apply it in the right way. because we don't want to purely apply the technology where it doesn't fit, but make sure we're solving a real need in a real problem, whether that be internal or external but we do carry a lot of -- we do have a lot of excitement for what it can do and we are building a significant expertise within the company to do that >> now i also had the chance to talk to cfo sarah fryer about an hour ago and i asked her to respond to that recent citron research claim that wall street is drunk on bitcoin nonsense. she says monetizing bitcoin is not the point. the point is to use it as a hook to further monetize and get people into the square cap and

making it a bigger part of their business she said bitcoin is one piece om we wanted to provide that acquiesce. she added that square sellers would not call the business yawn worthy or boring they depend on it for their own businesses >> so the thinking there is they have the ability to accept bitcoin as a payment option, and that's just going to bring people in to the system to use potentially other? are they seeing that sort of traction, that sort of cross-selling nature already or no. >> well, they see that it's getting people into the ecosystem. it's one thing they would say they can offer on sop of all the other function nalts that the square cap can do. they would let people transact through with bitcoin and they said there is not a demand for it now where there is a demand for buying and selling within the app but it's just a hook to get people in. and they are monetizing the cash app. >> deirdra, thank you. deirdra bosa on square

you've been pouring through the report >> i think what went wrong with square in terms of the stock being down is that expectations were too high. i think a lot of the metrics look really good the revenue 51% acceleration and continuing to accelerate and grow i think maybe the whisper number was a little higher. but these numbers look pretty good to try to take out how much bitcoin hype is in the stock, i don't really know. but i guess some, right? but bitcoin has been down for a while and the stock has continued to rally this year i think these are pretty impressive numbers i think there is a -- i don't think them as yawn worthy businesses at all, to use andrea's quote but we'll get to him later. >> when they announced this bitcoin, i think exactly what deirdra said they're using this there is a command for it think of venmo it's a peer to peer payment system it's mobile. they are going to compete with coin base. coin base did a billion dollars in revenue if you can get any piece of that, they said they did $34 million. it is actually a slightly positive business.

that's a good business to work on and i know andrew is going to come on here the company can't help if wall street, if investors are drunk on the bitcoin stuff they're actually tamping down expectations for it. and that is the sort of thing you want in innovative management to push it to new businesses. >> that was my read-through as well and jack dorsey actually going after it and saying hey, this is a small part of our business, and laying that out there. i think you're right some of it is people just jump in because of that but i think this opens up something that is pretty interesting. this could be a huge growth area as well. >> let's bring in andrew left, the notable short seller who took aim at square in a tweet on monday, citron said square could fall to 30 bucks a share, down about 39%. calling the company a quote/unquote collection of yawn worthy businesses. that was only surging because wall street was drunk on bitcoin nonsense citron research founder andrew left joins us now. andrew, good to see you. >> hi, everybody we had a direct response from the cfo to your comments about bitcoin. they were very clear on the call

and they've been very clear all along that this is a very small part of the business so when you talk about wall street being drunk on this bitcoin and bitcoin has come down, as karen has pointed out, how much of this is still in the stock, do you think? >> it's a very small part of the business but it's a very large part of the narrative. the truth is it's a credit card processing company that actually has take rates that will probably contract over time, like every processing company. so where do you go where the sas company, even though you many companies in that that are not sas companies. you say we're going to do something with bitcoin you do everything to keep the focus away from the core business even what i heard right, there bitcoin is a hook. we're looking to do something with bitcoin this is a $19 billion company. we're not talking about a little company that might figure out bitcoin in the future. let's look at their business, their core business and where this business is going to be in two or three years and whether or not you're worth 15 times revenue. >> sure. but in terms of the bitcoin part

of the argument and part of the business for that matter, the company is not putting forth that they are a bitcoin company. the company doesn't seem to be, at least from the statements they said and the conference calls they have not. >> how many times have they mentioned -- >> right but they have outlined how much they are losing on bitcoin and how little they are making on bitcoin. so in terms of your narrative coming true and taking the bitcoin premium out of the stock, are you waiting for the real estate investors out there, or the investors at large out there to sudden di realize this is a small part of the business as sarah fryer, as jack dorsey have said. >> first of all, they can't lie about the numbers. they can't go on the conference call and say the business is bigger than it really is it's the numbers that soakers everyone up really fast. the drunk part of it is when you read the news. go google. go look at what people are discussing what at what we're discuss right here why are we discussing core and bitcoin? let's move on to the business? hey andrew, what are the take rates? how is it going to be in how it is going versus clover let's look at their business

why are we even discussing square and bitcoin >> well, you brought it up i guess so that's the reason we're discussing it. >> but my point is i would rather discuss the company. >> what? say that again i'm sorry. i missed what you said. >> i would rather discuss the company and the trajectory of their business what i said is the reason why the stock got to where it is it got caught up in a sas multiple updraft along with the bitcoin mania. tucked the stock to where it is at five times revs where it shouldn't be >> okay. i am absolutely open to the idea that there is a lot of bitcoin fluff left in the stock. but when you're saying the company keeps talking about it, the company could have said we don't break out our bitcoin. we they could have said that instead they highlighted how small bitcoin was to their business. >> why are discussing? >> you brought it up that's why >> it's so insignificant you're insulting investors it's a $19 billion company and we're discussing 200,000 in net

revenues next, let's move on. >> yes, let's move on to the business, subscription and services >> not the dreams, not what could happen let's move on to the business. >> i'm trying to move on to the business so subscription and service growing very nicely. that is a very interesting part of the business. i think maybe one of the things waiting on it today is they're even out projections they're going to put a lot of spend back in the business operating expenses are going to be high. now you could maybe argue all right, it's not growing as fast. i don't really buy that revenue is growing. >> you want me to maybe argue or give you the other side of this? at 2.5% take rate, what they're doing on these transactions, they'll be able to keep their small emergence. they'll have to take that down to the larger emergence there is a lot of competition i remember when square came out. it was very innovative i remember seeing it for first time wow, how cool is that. it's not like that anymore now it's mainstream. look what's happening in china

with ali pay, a half percent you're looking at a business, the real business, not a dream business, not the small what might happen, the real business is on a long-term trajectory of contracting margins. that's it. and as for a multiple, you can give to it a certain part of the business, but not their caviar business which competes with grub hub. >> forget caveats. would you agree, though, that even if those margins are compressing, the top line is growing very quickly >> it could grow but it faces a lot of competition and eventually hits a wall it's more in the seventh inning of new customers instead of third inning. >> andrew, we'll quick does small business optimism play a role whatsoever if small business is going to come back in major way in the first 15 months of a trump administration, does that help the bull case for square or does that not even play into it >> i would rather -- i would much rather own paypal

i'm pieg a cheaper company with just as much penetration why not own paypal >> all right i want to switch gears let's not talk about square orbit coin for that matter anymore. let's talk about alibaba, andrew you're favorable, right? you like it. >> yeah, love alibaba. i really do. a lot. >> what is the core of this? it's interesting there are a lot of short sellers who will be against you, the short seller. >> oh, many. >> many. it's an interesting sort of lightning rod stock. so what do you see >> i mean, it's the anti-square. it's a company that has built such a big moat on the biggest dam story in the world, obviously china. it's the tollbooth to the chinese middle class, 500 to 600 million people they have a wonderful platform on which they're building it on. i think if you own albie live b -- alibaba, if you miss it this quarter, next quarter or the next quarter it's lagged amazon i don't know why i guess there has been concerns

about a possible trade work, people look at margins but jack ma is a superstar, the investments he snaking with the company and the ecosystem he has built for china, there is nothing more you can say now, if the whole nasdaq goes down, this will probably go down with it. but if you didn't buy facebook at 150, 155 and you're looking at it now in 170s and looking at amazon i admit, i sold my amazon way too early. at 1100, i thought i killed it and i sold it. i'm not making that mistake with alibaba. >> andrew, great to speak with you. thank you. >> nice to see you >> andrew left of citron research. >> i agree with alibaba, for whatever that's worth. >> but on square, that's a totally different story. what did you make of the conversation >> tougher. >> tougher in terms of being on his side >> no i'm on his side on the baba side. square i have a little more difficulty following along with andrew on that one i tend to be leaning towards what you're talking about. but i think baba is the interesting one here, and i agree with him this is a company with

ecosystem. they have absolutely much more upside still ahead, tesla volatile in the after hours session the always colorful elon musk is talking on the conference call right now. pant tig he is very colorful we'lly bri you the comments, straight ahead we use our phones and computers

the same way these days. so why do we pay to have a phone connected when we're already paying for internet? shouldn't it all just be one thing? that's why xfinity mobile comes with your internet. you can get up to 5 lines of talk and text included at no extra cost. so all you pay for is data. see how you could save $400 or more a year. and get $200 back when you sign up for xfinity mobile and add a new line of unlimited. xfinity mobile. it's a new kind of network designed to save you money. click, call or visit an xfinity store today. welcome back to "fast money. tesla ceo elon musk talking to investors on the call. let's get back to phil for details. phil >> questions just beginning and one of them centered around where they are in terms of their production rate right now. and elon musk talking about the

giga factory and battery pack production increasing. here is what he had to say about where they are right now in their production at the giga factory. >> the thing i'm most excited about is the rapid increase in output we've got just in the last 24 hours at giga factory managed to achieve a sustained rate of 3,000 packs per day. and actually reached a peak hour with ex-trap rated would be a rate of 5,000 cars per week. >> elong musk once again reiterating that he expects the company to be gap profitable in the second half of this year we're going to jump back on to the call if there are more comments, we'll have them tomorrow morning on "squawk box." >> back to you >> and i will see you then thank you, phil lebeau in

chicago. this stock is down by .10 of 1%. this has to be the most market reaction to tesla earnings we've seen in a very long time, guy. >> i still think you got to play in elong musk's camp you own the stock against 280, people tell you to be with it in options. that's probably the right play he has proven all naysayers wrong but for the brief period down to 245. i think the stock is a buy. >> i would agree and if you're being to be long, why not have protection to the downside on something like this. at some point everybody always says there will come a point when tesla gets the big hit. in that case you would want to have protection for sure. >> it's also getting to the point where they're giving us monthly deliveries you had a quarter where elong musk seemed like he was on twitter every day, maybe even more than kanye. there was a lot of information in the stock when you see a stock with implied movement was almost 8% or something like, that not doing anything right now, it seems like there is a pretty good push and pull right here,

and the story is kind of equilibrium until something changes one way. ulbencfeels like the conferee cod swing tesla is down about a percent. up next, final trades.

final trade time pete >> health care's had a tough time but abbvie, giddyup. it's going higher. >> i bought it today risk guard thing xerox. carl acicahn has taken over >> snap. i bought it today.

>> chair woman in full form. full form. >> spotify in my humble opinion, melissa lee. >> you agree with dan, if you don't like that narrative. i'm melissa lee. thank you so much for watching see yo my mission is simple, to make you money i'm here to level the playing field for all investors. there's always a bull market somewhere, and i promise to help you find it. "mad money" starts now hey, i'm cramer. welcome to "mad money. welcome to cramerica other people want to make friends. i'm just trying to save you some money. my job is not just to entertain but to educate and teach you so call me at 1-800-743-cnbc or tweet me @jimcramer. you know what? you know what? i'm kinda getting real tired of all the hate tha